When just cause is alleged as the basis for terminating an employee’s employment, employers are often contacted by Service Canada seeking more information about the reasons for termination.

When advising on this situation, we often remind employers of the following:

  • Section 51 of the Employment Insurance Act (the “Act”) requires the Employment Insurance Commission (the “Commission”) to give an employer the opportunity to provide information as to the reasons for the loss of employment. However, providing information pursuant to this section is non-obligatory for employers.
  • Subsection 126(14) of the Act requires an employer to provide any information or document that the Commission requests if the Commission serves notice personally or by confirmed delivery service on the person from whom the information or document is requested.
  • If an employee is denied employment insurance benefits, he or she can appeal that decision. Case law suggests that it is very risky for an employer to participate in this process. Because of the concept of “issue estoppel”, an employer’s participation in this process coupled with a finding in favour of the employee, may later prohibit an employer from arguing in a wrongful dismissal lawsuit that it had just cause to terminate the employee’s employment.

As a result, our advice to employers in responding to a request from Service Canada is often as follows:

  • If the initial request for information, reasons, or documents is made via telephone (as it often is), consider requiring Service Canada to put the request in writing and properly serve it pursuant to subsection 126(14). This requirement will also help the employer avoid any claim by a former employee that his or her personal information was improperly released to a third party. If a request is not properly made pursuant to subsection 126(14), consider simply confirming to Service Canada that the termination was for cause. Consider also at this time declining to participate in the process.
  • Only provide the information and documents that Service Canada properly requests. There is usually no benefit in providing anything more. In our experience, Service Canada will often only request the termination letter (which likely contains the grounds for the just cause allegation). If so, provide the termination letter and nothing more.
  • Mention in the response letter to Service Canada that (a) the employer is only responding because of its obligations under the Act and that the employer takes no position on whether the employee is entitled to or should receive EI benefits, and (b) subject to an ongoing obligation to comply with the Act, the employer does not wish to participate further in the process.